Having an arcade in a bowling center certainly isn’t what it used to be. Years ago, bowling center arcades would be mostly filled with video games and a few redemption consoles. Now, it’s the complete opposite as gamers get their fix on home consoles instead of public arcades.
But that doesn’t mean arcades can’t be extraordinarily profitable if done correctly. With the right partnership or proper investment, bowling center arcades remain quite lucrative and can boost the bottom line of a bowling center considerably.
Reaching that end, of course, has its challenges, and can be influenced by everything from selecting the right games to making sure they are laid out correctly in a space with enough room.
Ryan Family Amusement Center, which has about a dozen locations throughout Massachusetts, hires an outside company to manage its arcades, a strategy which is becoming more common throughout the country. Peter Campbell, manager of the South Yarmouth location, said the relationship with its outside vendor is a strong one.
“They strategically place games at all of our locations,” Campbell said. “They service bowling alleys as well as about 100 street accounts including hotels and motels, so they are certainly experts at it.”
Knuckleheads Bowling & Indoor Amusement Park in Wisconsin Dells, Wis., also hires an outside company to manage its arcade.
“I think the biggest challenge is making sure there is something for all ages and making sure there’s enough in there to keep families interested enough to stay longer throughout the day,” said Operations Manager Adam Pohlkamp. “We have an indoor park, which is obviously smaller than a Six Flags or outdoor park, so we have to give them more things to do, and the arcade is a big part of that along with our bowling.”
Pin Street at Ft. Myers, in Fort Myers, Fla., also uses an outside company to manage its arcade, but Manager Terry Leis said the arcade has become less and less part of its business over the years.
“It’s just not part of the experience anymore,” she said. “Years ago, it used to be a big part of it before all of the home and handheld gadgets. We mostly see it used when there are birthday parties or if adults bring their kids to their league.”
Hot Shot Amusements, a Merritt Island, Fla.-based company that manages arcades for a variety of businesses and bowling centers in Florida, including the Firkin & Kegler Family Entertainment Center in Orlando, has been in business for about 25 years and has found a niche as a top-tier vendor to handle and support all arcade centers’ needs, particularly FECs over the last 10 years.
Owned by Louis Riposta, Hot Shot not only manages the arcade games, but also advises centers on construction and expansions, understanding the grand scope of what an arcade can offer.
“The easiest thing a center could do is have me show up,” operator Darrell Kainer said. “I think the biggest challenges are when we experience clients who just don’t understand what the game business is truly all about. They have an idea but don’t understand the revenue earned off of it. They are just basically hopeful and they always give us too little electric and too little space. There’s not a universal understanding of the size needed and how they need to be operated. Sometimes an operator will say, ‘We have laser tag coming. That’s going to be huge.’ And I say, ‘It could be, but give us 500 square feet more in the arcade, and let us show you what that can do for you, too.’”
Like most modernized bowling centers, Ryan Family Amusement Center’s arcade is comprised mostly of redemption games so people can win tickets and trade them in for prizes.
“Video games are not that popular anymore,” Campbell said. “We have a lot of redemption games like skee ball and basketball because that’s what the smaller children want. About 85 percent of our arcades are redemption games, with some video games and air hockey in every one of them.”
At Ryan, one of its most popular new games is the Sega Key Master, where players must navigate a key into a hole to win big prizes such as iPads, iTouches and other pricey payoffs.
Knuckleheads’ arcade is also mostly redemption games, with a few racing and shooting video games. Pohlkamp said merchandise games where people can win everything from stuffed animals to giant balls remain popular in formats that include light games, a monster drop and crane games.
“We have a lot of games that pay out tickets like basketball and skee ball, but the merchandise games are really popular,” Pohlkamp said. “People keep putting $2 in the machine to play our big crane game where people can win giant inflatables and bouncy balls with our Knuckleheads logo on it.”
As far as video games, Pohlkamp said the “Terminator” shooting game and “The Fast & Furious” racing game are extremely popular.
“Shooting and racing games just seem to be what people like the best because they can’t really have that experience at home,” he said.
Buffaloe Lanes North, located in Raleigh, N.C., owns all of its games, offering about 20 games for the 42-lane center. General Manager Frankie McDonald said the racing and shooting video games are popular, but the redemption games are the most popular.
“Skee ball, basketball and air hockey are really popular,” she said. “But we have a new one that is a milk jug toss that is really getting a lot of attention. And after that, we have a Wheel of Fortune game that a lot of people like to play where you can win tickets. The children and teens really like to play games where they can win tickets and get something to bring home.”
Pin Street offers about 12 games, most of them merchandise games such as the monster claw and machines that lure gamers with high-end prizes ranging from jewelry to electronics. They also offer an air hockey table and some racing and shooting video games.
“If it was up to me, I would have some different games in there to offer more variety for all ages,” Leis said. “I think the ones we have in there now are for older kids mostly, and we need more games for the younger kids at birthday parties.”
Kainer of Hot Shot Amusements said bowling center arcades need at least 16 to 20 feet of full redemption space.
“When people walk into a room, they get a game card and the next thing they look for is toys,” he said. “They are scoping out what they can win and how much it takes.”
Another issue, according to Kainer, is gouging people at redemption counters.
“What we have established as a working model is that you have to give people reasonable, affordable expectations when it comes to prizes,” he said. “We don’t double and triple price items because that’s highway robbery that places like Chuck E. Cheese do. It doesn’t work for small bowling centers. So you have to create a system where people feel like they can win good items and keep coming back.”
When Hot Shot Amusements looks at space, most centers say they want about 40 pieces.
“But we try to go with 25 strong ones,” Kainer said. “You have about four pieces at about $15,000 each, and then work your way down. We look at demographics and do research and see how many people live in a 10-mile radius and how many schools are in that area. And then we drive around and look at the economy and the amount of foreclosures and construction and business overall. So when we take on a project, we know we won’t fail.”
Core items, such as air hockey and ice ball lanes, don’t need to be rotated very much, according to Kainer. And shooting and racing video games are essential, as is one boxing game.
“You establish the core pieces and then you can add in the fluff like a high-end crane that can cost as much as $7,500, but you can get one for $2,000 and add some custom artwork with LED lights that we add ourselves. You can be creative and save money in these tight budgetary times so your money comes back to you faster.”
He said adding popular games such as a licensed NBA basketball game can make big differences.
“You get that important licensing and that great look and feel for your arcade for about $5,000 and it gives out tickets,” he said. “Sports games like that can make a difference in your arcade. That competition also breeds excitement.”
Kainer said it takes about $150,000 to $300,000 to start an arcade.
“But the return of investment is there,” he said. “We know they will make their money back in about a year. But it takes an investment of time and resources. When we first get into a center, I am there every day for two weeks training and being involved in their business and increasing their business and talking to them about programs and birthdays and things that will draw people in.”
Pohlkamp said the center’s outside vendor consistently rotates machines because layout is an important factor to an arcade’s success.
“There’s a lot to think about when deciding the layout of your arcade,” Pohlkamp said. “Our company comes in and constantly moves them around. The brightest and most attractive games have to be in a place to lure people in but you can see them from a distance. The bigger ones are farther back so that when people see them, they have to walk by other ones and hopefully get more foot traffic and more game play. We put our skee ball on an upper level to once again make people walk by everything. And our company is always looking to move games and is buying new ones and selling ones, which is a big challenge.”
Maintenance, once a major issue with arcades, has improved over the years. Bowling centers mostly have to deal with things such as coins not registering and ticket and coin jams, if the arcades are still using coin-based systems.
“There’s probably about a half dozen guys that service them but they don’t really have that much to do with daily maintenance,” Campbell said. “Most of the stuff like loading tickets and coins not registering, we handle that ourselves. Some people may put an oddball coin in here and there and it clogs the machine, so we just take it out ourselves. Mostly the service issues are moving the games around from center to center.”
Knuckleheads has a team of maintenance people that can fix everything throughout the amusement center, but there is one employee who specializes in technical issues such as the arcade.
“But it’s not that bad,” Pohlkamp said. “There are standard ticket jams and things like that, which we can take care of. If there’s a wiring issue, they have to step in.”
Part of the reason Knuckleheads doesn’t have as much maintenance issues is that it works on a credit card system instead of coins.
“We don’t really deal with coin issues anymore except for about 10 percent of our machines which are the ones where you push coins off the edge with coins you put in to win tickets,” Pohlkamp said. “And the card system works amazing. You can load any dollar amount you want on there, and the maintenance issues become less and less.”
Kainer said the card systems – his company uses Embed – are well worth the $55,000 to $65,000 investments his best customers made.
“That kind of money will get you an Embed system for around 30 games,” Kainer said. “With technology, things gets better, and I can say 100 percent that when you invest in a debit-card system, you will be happy you did. If you were building a race car and you needed a top-performance engine, you would buy the best. And Embed is the best. They are involved and they know how you may be a one-man show and want the easiest maintenance you can have. I have six locations with them and not having to worry about them is incredible. When you don’t have to go and check token levels and tickets and all of the jams are all gone, you are just creating a better customer experience. They no longer feel like they are getting ripped off. They are no longer kicking the machines or tipping them over. As far as the machines themselves, I have some that have been around 10 to 15 years and still work great and I will get another five years out of them. Of course, the new ones, they still look brand new after four or five years after you spray them with some Windex and get the Magic Eraser out.”
Kainer said customers also will go to a place with a system like that before they will go to one without.
“When you don’t have tickets to carry out the door or redeem, you can accumulate points trip after trip and earn the thing you really want instead of settling for something with the amount of tickets you have or taking the tickets home and losing them. And teens really like the credit card concept because they see mom and dad with credit cards and they like having one, too.”
Buffaloe Lanes, which has four bowling centers that are independently owned, has one employee on staff that deals with maintaining the arcade for all four centers.
“He has a shop at one of the largest centers that he takes games to when they need to be maintained or cleaned or transferred to another center,” McDaniel said. “He’s in charge of trading them out and making sure they are all properly operating. We see the older games require much more maintenance than the newer ones. But most of the problems are with games eating tickets, which is something we deal with easily without his help. The same goes for when a bad coin jams a machine up, it’s something we do ourselves.”
The South Yarmouth Ryan Family Amusement Center has expanded throughout the years, with its most recent expansion about four years ago, bringing the arcade up to about 45 pieces.
“That seems like plenty right now,” Campbell said of the 20-lane bowling center. “Some places have over 125 games, but we think we have the right balance right now. But that expansion certainly was the right thing to do as far as it being successful. It’s a big part of our business. People come here just for the games, and the arcade has always been a big part of what we do here. Kids and adults seem to like them.”
Knuckleheads expanded its arcade and redemption center over the last two years, taking up space formerly occupied by a gift shop.
“We opened that up to get more games in there and expand the redemption center,” Pohlkamp said of Knuckleheads, which attracts tourists in the peak season but many locals year-round. “So we have more than 100 units now, which is where we need to be. The arcade is and always has been a huge revenue generator for us.”
Buffaloe Lanes North, which has existed for about 30 years, actually decreased the size of its arcade recently to expand its birthday party rooms. But McDaniel said the games are a crucial part of business because they drive birthday parties.
“We have a lot of birthday parties that include tokens as part of their package,” she said of the center, which is in an affluent area consisting mostly of locals. “We added more redemption games over the years because that’s what the birthday party crowd wants. I just don’t think our center would be as enticing for birthday parties if we didn’t have the arcade. Plus, on busy weekends, the arcade can be pretty packed and we have an hour wait for bowling. So we offer packages that include packages for the arcade, so people buy that package and head into the arcade while they wait for lanes to become available.”
Kainer said centers like Firkin & Kegler often realize they should have had a larger arcade but are then locked into the space they have.
“They have about 1,700 square feet with about 30 games in there, and now they can’t expand because they dedicated allotted space to bars and other things,” he said. “So it’s tough to expand there. When we were called in there, everything was almost done, so we couldn’t change much and just did the best we could with the space we had. But of course looking back, if they had more space they would have made more revenue.”
Kainer said he’s discouraged by some new centers that aren’t installing arcades, such as Disney’s Splitsville in Downtown Disney in Orlando.
“I think it’s like leaving money on the table,” he said. “There is a lot of money to be made in arcades. Arcades and bowling go hand in hand and are the future. An arcade is a necessary footprint for a bowling center. The only losing proposition you may encounter is if you build your business wrong and people are not coming into the door. I am just floored when I see a place like Splitsville not have a gaming center. People aren’t just going to come for $85 an hour bowling and three pool tables. Whoever owns the mindset that you don’t need an arcade in bowling centers is just wrong. People love playing air hockey or basketball or throwing things at targets. It helps the environment and makes a lot of money. I can look at someone in the eye and say, ‘If you put an arcade in here, I am guaranteeing you will be paid $250,000 next year.’ And they say, ‘We are not doing games.’ It’s a mindset I just don’t understand.” –
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